Pakistan’s economy posted an unexpected surge in growth during the April–June quarter of the previous fiscal year, with the government approving a 5.7% expansion driven largely by a 20% jump in industrial output. The figure, endorsed by the National Accounts Committee (NAC), defied widespread concerns about sluggish performance amid high interest rates, tight fiscal policies, and an overall challenging investment climate.
The NAC, chaired by Awais Manzur Sumra, finalized the quarterly GDP data after a meeting held in Islamabad on Wednesday. The growth figure for the fourth quarter stands in sharp contrast to the 2.8% growth recorded in the preceding quarter, highlighting an unusual rebound in key sectors. According to the Pakistan Bureau of Statistics (PBS), the growth also pushed up the full-year GDP estimate for FY25 from 2.7% to just over 3%.
The numbers come at a time when the economy has been under pressure from inflationary trends, reduced energy demand, and stringent conditions under the International Monetary Fund program. Yet, the data suggests that Pakistan could potentially sustain growth rates close to 6% without resolving deeper structural challenges, an outcome that surprised both policymakers and analysts.
The NAC’s approval included striking revisions across multiple sectors. The industrial sector recorded a quarterly growth of 20% in Q4, a sharp turnaround from 1.2% in the previous quarter. Electricity, gas, and water supply posted an extraordinary 121.4% growth in the April–June period, reversing a 4% contraction earlier in the year. PBS attributed this spike to higher subsidies and the effect of deflators on the power sector.
Similarly, the construction sector showed a strong performance with 17.7% growth, up from 10.7% in the third quarter. This is notable because construction has been among the sectors hit hardest by high taxation and borrowing costs. Growth in the mining and quarrying sector moved from a contraction of 2.9% to a modest expansion of 1.94% in the same period, supported by higher production of limestone and marble.
The upward revisions extended to the agriculture sector as well. While livestock growth fell from 4.7% to 2.94%, the output of minor crops jumped significantly — from an initially reported 4.8% to 19.6%. PBS cited higher green fodder production as a key driver behind the revision. Annual agriculture growth was revised to 1.5% from the earlier 0.56%, while industrial growth was revised from 4.8% to 5.3%.
Large-scale manufacturing, which had been contracting in earlier quarters, also showed a surprise 3% growth in Q4, indicating an uptick in industrial activity. On an annual basis, the electricity, gas, and water supply sector grew 28.5%.
The NAC also revised growth figures for the previous quarters of FY25, increasing Q1 growth from 1.4% to 1.8%, Q2 from 1.53% to 1.94%, and Q3 from 2.4% to 2.8%. Similar adjustments were made for agriculture growth during these periods, reflecting the effect of updated annual data on quarterly estimates.
The figures, though encouraging on the surface, have also raised questions about the consistency of the data. Some NAC members pointed out discrepancies in construction output, energy sector figures, and quarterly variations. This scrutiny follows earlier disclosures that PBS had underreported imports worth $11 billion over the past two years due to system issues.
Even with these concerns, the growth figures suggest that Pakistan’s economy retains pockets of resilience despite fiscal consolidation and high borrowing costs. If sustained, such momentum could help ease some of the pressure on economic management and fiscal planning. However, experts stress that lasting stability would still require structural reforms, particularly in energy pricing, industrial competitiveness, and trade balance.
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